1 in 3 adults in America carry credit card debt from month-to-month, according to the National Foundation for Credit Counseling. A staggering 61% of adults admit to not having a budget. In other words, many people – even those in the middle and upper classes – have work to do when it comes to establishing healthy financial habits.

For those with lower incomes, however, having a solid foundation on which to base their daily spending decisions can mean the difference between self-sufficiency and crisis. “Commonly, compared with middle class and higher income Americans, low-income persons save much lower portions of their incomes and accumulate fewer assets.” (1) That means that people with lower incomes must think more strategically about ways to save more than those with a larger monthly surplus.

Housing prices in the Bay Area make saving even more challenging than in other parts of the country. According to San Mateo County’s most recent survey, “more than 50 percent of owners with mortgages . . . and 47 percent of renters in [the county] spent 30 percent or more of [their] household income on housing” (emphasis added). For the approximately 46,000 people in San Mateo County who live in poverty (2), trying to pay the mortgage or rent and save strategically each month is no easy task.

Samaritan House created the financial empowerment program in order to give its clients the financial tools necessary to achieve economic stability and self-sufficiency, and to stay out of crisis. Services include educational classes and one-on-one counseling about topics such as budgeting, banking, credit, identity theft, and predatory lending. Certified Volunteer Income Tax Assistance (VITA) volunteers also provide free tax preparation to households of limited means. Perhaps the most inventive aspect of the program is the Start2Save plan, where clients can save up to $500 of their own money and earn $1,000 in matched savings that they are encouraged to use as an emergency fund. To qualify, clients must attend ten hours of financial education classes and save at least $20 per month.

According to Harvard economics professor Sendhil Mullainathan, when people have difficulty saving for the future, it is not simply because they lack self-control. Rather, it is because they don’t have the proper savings tools in place. The Financial Empowerment Program gives the clients of Samaritan House the tools, techniques, and confidence they need to build a more secure future.

Samaritan House’s new financial workshop classes, Secure Futures, are helping equip our clients with the financial skills they need to build assets and plan for the future.

Secure Futures Instructor, Carlina Davila is very pleased with the results she is seeing from her students. “It is really the small changes in spending habits and attitudes towards money that are having such large behavioral changes.” One of Carlina’s clients has started a new savings account and had managed to put away $90 over the course of a month just by cutting back the number of Starbucks each week. “Once our participants lay out their monthly expenses to create budgets, they’re really able to look at areas that they can cut back.”

To learn more about this program, view our program flyer (English) (Spanish) or contact us for more information.